4 Project Budget Myths

Brad Egeland is an IT/project management consultant and author with over 25 years of software development, management and project management experience leading initiatives in manufacturing, government contracting, gaming and hospitality, retail operations, aviation and airline, pharmaceutical, start-ups, healthcare, higher education, not-for-profit, high-tech, engineering and general IT.

Here are four false (but surprisingly common) assumptions about managing project budgets, and how to avoid their dire consequences.

 
Managing the project budget sometimes seems like the most monumental task in the world, destined to take all of your time and still result in frustration and cost overrides. However, it is one of the most critical tasks you will perform, right up there with ensuring proper requirements definition — and, surprise, one can’t really be very successful without the other).
 
In a previous article — “The Budget Abides” — I discussedfive ways to keep your project's budget in line with the expectations of both your management and your customers. Here, I’ll refute four myths about managing project budgets and forecasts.
 
1. Detailed budget status reporting scares customers.
When the project budget comes up as a discussion item with the customer, it’s usually not to give them good news. That’s especially true if the topic has not been something that was part of ongoing discussions or project status calls. If it’s the first time you’re talking to the customer about the budget, it’s probably to tell them something is wrong.
 
The budget and ongoing forecast updates are items that should be in front of the customer throughout the engagement. If it’s …

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